Rupert Murdoch’s troubles are far from over

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The acquittal of Rupert Murdoch’s favorite executive, the flame-haired Rebekah Brooks, on charges of phone hacking and destroying the evidence might have marked the final act in one of the most bruising and expensive chapters in the history of News Corp.

It hasn’t turned out that way.

The $85 million that Murdoch paid to help keep his protégée out of jail has done little more than stoke the fires of resentment against his company in Britain. It also reminded U.S. federal authorities of the likelihood that similar crimes have been committed in America.

There is little worse for a media company than becoming a front-page story. For the past nine years, Murdoch’s empire has been dogged by accusations that it had been running a criminal operation to bribe public officials and steal messages from cell phones to feed the lucrative scandal sheets that funded News Corp.’s growth from the get-go.

The London investigation led to a number of trials that proved Murdoch’s staff paid government employees for information and hacked phones.

But the showpiece — at least so far because more bribery trials are set for later this year and authorities on both sides of the Atlantic are considering legal action against News Corp. — was the trial of Brooks, who ran Murdoch’s London press operations, and Andy Coulson, her deputy, successor, close associate and secret lover. When the frenzy around the hacking crimes was at its most intense, Murdoch said his top priority was not protecting his company, its shareholders or his six children who are set to inherit the firm — but Brooks.

He proved as good as his word. The 83-year-old media tycoon spent millions of dollars on Brooks’ lavish defense, while prosecutors operated on a cheese-paring budget. Many Brits saw for the first time a U.S. system of justice operating in the Old Bailey, England’s principal criminal court: May the richest side win.

The trick worked. Brooks walked free. But instead of bringing to an end questions about how far up the executive ladder the criminality reached, her acquittal achieved the opposite. In Britain there is widespread disbelief and anger at the Brooks verdict. As one veteran U.S. editor put it, “Rebekah is Britain’s O.J. Simpson.”

Those who have worked for Murdoch also found the decision hard to fathom. While he pays little attention to the running of the Fox movie studio or the Fox TV channels, even Fox News, Murdoch likes nothing better than to play with his newspapers — like a teenage boy with an Xbox. Top editors operate under a rough-and-tumble ethos. Murdoch makes regular blunt calls across the Atlantic to make suggestions he expects to be followed to the letter. As he once said, “I try to keep in touch with the details.”

Far from showing Brooks as the consummate professional and the ultimate Murdoch executive, however, her defense rested on convincing the jury she did not know what she was doing. Even though Murdoch had made her editor of both his tabloids, then boss of the whole London operation. The tight grip over every last headline and picture that Murdoch expects from his editors was, the jury was led to believe, conspicuously missing in the one editor he favored above all others.

In the absence of any convincing evidence to the contrary — Brooks was also charged with destroying evidence — the jury accepted that it could not be proved beyond reasonable doubt she knew that phone hacking was going on directly under her nose.

At the least, Coulson’s guilt confirms that criminality reached the door of Murdoch’s office. “For better or for worse,” Murdoch himself put it, “our company is a reflection of my thinking, my character, my ideas.” Though he seems to have handily forgotten his mantra, “The buck stops with the guy who signs the checks.”

Nothing more demonstrates the bullying ethos that governs Murdoch’s company than its response to the hacking investigation. Andy Hayman, head of the anti-terrorist team at Scotland Yard who, despite overwhelming evidence of wrongdoing at News International repeatedly declined to prosecute, left the force abruptly to become a highly compensated columnist at the Times, Murdoch’s mid-market London tabloid. Attorneys representing the more than 1,000 hacking victims were, on instructions from Murdoch’s own attorneys, snooped upon and secretly filmed by private detectives, as were the main attorney, Mark Lewis’ former wife and young teenage daughter.

Private eyes also secretly spied on members of the House of Commons committee investigating hacking by Murdoch employees and who, when Murdoch appeared before them in July 2011, elicited from him the line, “This is the most humble day of my life.”

The Conservative member of Parliament who made excuses for Murdoch in the committee, former drug addict Louise Mensch, left the Commons soon after and is now a highly paid columnist on Murdoch’s Sun.

While Murdoch gets great enjoyment from tinkering with his publications, their main function could be more sinister. Under the pretext of finding scabrous tittle-tattle that sells papers, Murdoch’s reporters compile dossiers on anyone who may be useful to furthering the company’s business. When journalists balk at this dubious work, private eyes like Glenn Muclaire are employed, a ruse that has spectacularly rebounded on the company.

Those who raise objections to Murdoch’s business aims or criticize his company can expect their private peccadilloes splashed across Murdoch’s front pages. Take Chris Bryant, the Commons media committee member who, in 2003, got Brooks to admit she paid police for stories. First, he had his phone hacked by Sun private eyes, then the paper outed him as gay and published a picture of him in his underpants.

Rather than face another long trial brought against it as a corporation by U.S. federal authorities that would further diminish Murdoch’s reputation and tie up his company, News Corp. will likely start bargaining over the hefty fine his firm must pay. As in London, money will be seen to have trumped justice.

What will happen to Brooks, who, despite the not-guilty verdict, has been wholly discredited? She may take up a senior post in Murdoch’s Australian outfit. The fact that Australia for many years was a penal colony is an irony not lost on the Brits.

For the medium to long term, News Corp. can only move beyond the mire when there is a change at the very top. Which might not happen for a very long time. If Murdoch lives as long as his mother, Dame Elisabeth, he has another 20 years before him.

Shareholders in his public company, run like the New York Times by a family trust holding Class A voting shares, must bide their time before they will be able to extract the true value of their embarrassing and troublesome investment.

Nicholas Wapshott’s The Sphinx: Franklin Roosevelt, the Isolationists and the Road to World War Two will be published in November by W.W. Norton.

Author Profile

Nicholas Wapshott is the International Editor of Newsweek. He previously served as New York bureau chief of The Times of London and editor of the Saturday Times of London. He is a regular broadcaster on MSNBC, PBS and FOX News. His new book "The Sphinx: Franklin Roosevelt, the Isolationists, and the Road to World War II" is due out in November. He is also the author of "Ronald Reagan and Margaret Thatcher: A Political Marriage" and "Keynes Hayek: The Clash That Defined Modern Economics."